Russia challenges dollar, China offers loans

Wednesday, June 17, 2009

YEKATERINBURG: China and Russia sought greater international clout at a summit Tuesday, with China promising a $10 billion loan to Central Asian countries, while Russia challenged the dominance of the US dollar as a global reserve currency. Russia also gave a prominent platform to Iranian President Mahmoud Ahmadinejad amid massive protests in Iran over his bitterly disputed re-election and questions in the West about the vote.

Chinese leader Hu Jintao said China will extend a $10 billion loan to a regional group that also includes Russia and four Central Asian states.

The move adds muscle to China's role in the Shanghai Co-operation Organisation, a six-nation group Russia and China use to counter the Western influence in resource-rich, strategically placed Central Asia. The other members of the organisation Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

The leaders of Afghanistan, Iran, India and Pakistan were also at the table, underscoring Russia and China's reach for regional clout and global influence. Hu said the loan is intended to shore up the struggling economies of its members amid the global financial crisis.

Meanwhile, President Dmitry Medvedev pushed his call for new global reserve currencies to complement the dollar at the summit. ``No currency system can be successful if we have financial instruments denominated in just one currency,' Medvedev said. ``We must strengthen the international financial system not only by making the dollar strong, but also by creating other reserve currencies.'


(BRecorder)p